I have tried to make this debate impossible to accept. If you are interested in accepting, please leave a comment.

I maintain that, in the United States of America, a progressive tax system is more beneficial than a flat-rate tax system.

BoP is shared.

1st Round is for acceptance only.
2nd Round is for constructing arguments only.
3rd Round is for rebuttals.
4th Round is for rebuilding your case (this includes responding to rebuttals in Round 3) and summarizing your main points. No new arguments or sources may be introduced in this round.

Violation of any of these rules will result in a seven-point forfeiture.

33% $183,250 to $398,350 ...$223,050 to $398,350 ..$203,150 to $398,350

35% $398,350 to $400,000 ....$398,250 to $450,000 ..$398,350 to $425,000

39.6% $400,000 and up ........ $450,000 and up ..........$425,000 and up

It must be noted that these are marginal tax rates. This means that if you earn $100,000 a year, for example, you do not owe $28,000. Instead, you owe 10% of $8,925, 15% of 27,325 (the difference between the top and the threshold of the second bracket), 25% of $51,600, and 28% of $12,150 (the difference between income and the threshold of the third bracket). This adds up to $21,293 for a tax rate of 21.2% (discarding other contributions such as 401k) [1].

Note that this is only the current US progressive tax system. While I may defend this system, I also reserve the liberty to defend progressive tax systems in general (for US application).

In the United States, the top 20% of households hold 88.9% of the total net worth, leaving the bottom 80% with only 11.1% [2] (table 2). In 2008, the top 400 taxpayers paid an average rate of 18.11% - even less than what one who made $100,000 would have to pay [3]. A fair tax system, then, does not charge everyone equally, but charges a higher rate on those who make more money - a progressive tax system.

Contention 2: A Progressive Tax Helps Reduce Income Inequality.

By charging the higher income brackets more than the lower income brackets, a progressive tax helps reduce income inequality. Few would disagree that the rapidly increasing income gap is harmful. The World Economic Forum lists wealth gaps as the biggest global risk (followed by unsustainable government debt) [4]. Additionally, the income inequality gap has only been rising, posing more and more problems. In the US, income going to the top 1% doubled since 1980 and, for the top 0.01%, it has quadrupled [5]. Similar events are occurring worldwide. In the UK, income inequality levels are returning to levels not seen since the age of Dickens, and in China, the top 10% bring home 60% of the income [5]. But all this only establishes the income inequality exists. Let's examine some of its effects.

High levels of income inequality limit overall economic growth and prevent that growth from benefiting the majority of the people. As Henry Ford and billionaire Nick Hanauer pointed out, consolidation of "so much wealth and capital in so few hands" depresses demand [5]. Jonathan Ostry of the International Monetary Fund suggested that economic growth "becomes more fragile" in countries like the United States that have high levels on inequality [6]. In fact, reducing this inequality - as a progressive tax assists in doing - and encouraging growth might, the IMF concluded, be "two sides of the same coin" [6]. High wealth inequality also results in a widening opportunity gap for children, preventing a level playing field for future generations and thus further limiting prospects of the American Dream [7].

Contention 3: Progressive Taxation Benefits the Economy.

By charging the rich more, a progressive tax helps stimulate consumption for the middle and lower classes. Without progressive taxation (and even with them), the wealthiest place an emphasis on positional goods - that is, goods that signal one's place in society. A major problem with positional goods is that they can increases the negative externalities on the rest of the population. Additionally, as other wealthy people purchase them, they become more common, and thus people have to go to further lengths to emphasize their social standing. Without a progressive tax, the wealthiest members of society can focus more on positional goods and expenditure cascades. Scenarios like this have already been demonstrated during the tax cuts when the tax code was made less progressive during and after the 1970s [8]. Concentrating too much wealth with too few people does not just widen the income gap but also results in "less stable economic expansions and sluggish growth" [6].

Progressive taxation combats these problems. In an abstract regarding the benefits of progressive taxation, it is reported that there is a link between progressive taxation and "more equitable income distribution, higher revenues, less financial and economic volatility, and faster growth" [9]. Progressive taxation reduces the burden faced by those with lower incomes, stimulating economic demand, while the burden on the rich raises revenue and still allows the wealthy to remain wealthy. Thus the rich remain rich while the middle and lower classes are encouraged to spend and invest. Additionally, the higher amount of revenue allows the government to invest more in things that benefit, if not everyone, then at least the general public. The taxes paid by all are used to build roads, fund education, law enforcement, and national defense, provide Social Security, Medicare, Medicaid, CHIP (the Children's Health Insurance Program), and more (common knowledge). Essentially, this all allows the government to build infrastructure.

Many rich even feel an obligation to help give back to society. Bill Gates, for example, supports taxing the rich more than the poor [10]. This is progressive taxation. And he isn't the only one. 68% of millionaires support a tax increase on people earning more than $1 million [10].

With that, I turn the debate over to my opponent. I look forward to seeing his case!

In this round I will post my contentions; in the next I will respond to pro's contentions.

1. A flat tax system is more fair.

In a flat tax system everyone gets taxed the same percentage.

2. A flat tax system is better for the economy.

It is those rich upper class people who hire people. If the upper class is taxed a greater percentage than the middle and lower class; then they won't be able to hire as many people; they won't be able to afford it. If all classes are taxed the same percentage then more people will be hired.

This is an over-simplified view of 'fair.' It is true that in a flat tax system, all income brackets are taxed the same percentage. However, this is unfair to the middle and lower income brackets. It can hardly be called fair for a man who makes $15,000 a year to pay the same rate as a man who makes $1 million a year. Say a flat tax was 20%. Flat taxes generally do not incorporate marginal taxation, and my opponent has not argued that they can or should.

So: The man who makes $15,000 now ends up with only $12,000

The man who makes $1 million now ends up with $800,000

Now, by no means should these numbers be equal. This would be a redistribution of wealth.

Under a progressive tax system with marginal taxation (and discounting outside factors that further lower the amount paid) the maximum a person who makes $1 million a year would have to pay is $353,763.75, leaving him or her with a profit of $646,236.25 (this is my own calculation based on the data I provided in the previous round).

The man who makes $15,000, on the other hand, ends up with $13,259.25.

The rich man still has plenty of money, and the poor man now has much more incentive to spend.

In the US, the average cost of living for a single person (including housing and transport) is $12,863 [1]. As I showed, under a flat tax system, the man who makes $15,000 can barely make ends meet, as he ends up with $12,000. He is not encouraged to spend at all, and his money does not enter the economy and affect supply and demand but remains in his wallet. Consumers like this man play a major role in driving the economy through consumption, and a progressive tax system encourages them to do so.

I will now address my opponent's second contention.

"2. A flat tax system is better for the economy.

It is those rich upper class people who hire people. If the upper class is taxed a greater percentage than the middle and lower class; then they won't be able to hire as many people; they won't be able to afford it. If all classes are taxed the same percentage then more people will be hired."

My opponent's assertion hinges on the idea that it is the rich upper class who hire people. Even if we assume this is always true, under a progressive tax system, the rich still have plenty of money and thus plenty of incentives to continue hiring people. The rich upper class still have almost $650,000 in profit under the US progressive tax system, and this factors out other impacts on how much they pay (such as 401k accounts). The average rich person actually keeps much more money than this. In the previous round, I demonstrated how income inequality is growing and the richest Americans continue to grow richer despite the progressive tax. Thus the progressive tax is not impairing their ability to make money.

Additionally, my opponent asserts that the rich create jobs and hire people, yet he provides no evidence for this (or his other claims). Multimillionaire Henry Bloch stated "rich people don't create jobs. Companies create jobs" [2]. Additionally, billionaire Warren Buffet has also called for higher taxes on the rich [2], falling in line with progressive tax theory. Furthermore, there are many articles and studies demonstrating that giving tax cuts to the rich does not create jobs [3, 4], putting another hole in my opponent's assertion.

But it's the rich that make those companies that hire people. For example Elon Musk is a billionaire and the founder of several companies; space x alone hires 30,000.
Those companies costed a lot to start; if he had been taxed so much more he wouldn't have been able to create as many companies and thus thousands more people would be unemployed.

As this is the final round, I will refrain from introducing new sources and arguments.

My opponent's only rebuttal to my arguments addresses my refutation of his argument that the rich hire people. My opponent did not use his round to address several of my points.

My opponent completely dropped my refutation to his first point that a flat tax system is more fair than a progressive tax system. I cannot further respond to any argument on this point he might make in this round; therefore he concedes this argument.

My opponent completely drops my contention that a progressive tax helps reduce income inequality. We must conclude that my opponent concedes this point.

My opponent completely drops my contention that excessive income inequality is economically inefficient. We must conclude that my opponent concedes this point.

My opponent drops my arguments regarding progressive taxation's benefits to the economy, such as increased revenue, faster growth, and less volatility. We must conclude that my opponent concedes this argument.

My opponent concedes my argument regarding that many rich (68% of millionaires) believe in progressive taxation. We must conclude that my opponent concedes this point.

My opponent has argued that the rich make the companies who hire people. In making this argument, my opponent drops my arguments regarding the effects the middle and lower classes have on the economy and my argument that the rich still have plenty of profit left and thus still have plenty of incentive to continue hiring people. We must conclude that my opponent drops both these arguments.

For all the reasons above, as well as the demonstrated benefits of progressive taxation, I urge the voters to vote PRO!

Once again, I would like to thank my opponent for engaging in this debate and wish him the best of luck!

Reasons for voting decision: Pro had sources. Pro presented well-developed arguments. Con barely refuted some of them. Con's overall formatting and presentation was better than the simple paragraph format that Con had. Con also agreed with Pro in the last round.

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